The Agricultural Commerce Financial institution of Zhangjiagang, situated in China’s Suzhou province in the Southeast portion of the country, has issued a 500,000 digital yuan (e-CNY) mortgage worth around Rs. 58.7 lakh, with intellectual property backing it as collateral. The mortgage was issued by way of unanimous approval by the town’s shopper markets regulator, monetary markets regulator and municipal officers. The People’s Bank of China, which presently has 15 provinces with e-CNY testing centres, stated recently that it wished to increase this number.
As per a report by local news outlet Sohu, the recipient of the mortgage is an entity manufacturing environmental safety gear for metal factories in Suzhou province. As informed by the entity, on account of an uptick within the variety of shopper invoices, it determined to experiment with the new borrowing methodology, the place the mortgage was straight launched into its e-CNY digital pockets. In the meantime, the Agricultural Commerce Financial institution of Zhangjiagang mentioned this was one more experiment within the nation’s e-CNY trial program.
The development also happened within two days of the People’s Bank of China mentioning that it needs to broaden its existing number of e-CNY testing sites, that are currently present in 15 provinces. As of May 31, the central financial institution recorded 264 million e-CNY transactions totaling CNY 83 billion ($12.29 billion or roughly Rs. 97,505 crore) since inception. Over 4.567 million service provider terminals throughout China settle for e-CNY as fee.
In addition to Suzhou, Shaanxi Province and the city of Guangzhou have also started to issue digital yuan loans since June, according to local media reports.
“Regulators can track and monitor illegal use of loan funds in digital yuan, and the digital currency will also facilitate monitoring fund flows of enterprises in real time for regulators to assess the operating and repayment capabilities of the firms, when digital yuan been mass adopted in the future,” said Liu Bin, director of Shanghai Pudong Reform and Development Research Institute in a report published by state-media China Securities Journal in July.